Merger talks are rumbling on between Manches and Penningtons as the private client firm confirms it is “optimistic” that a deal will be done to create a £60m firm of roughly 250 lawyers.
Sources at Manches also confirm that the merger is “still on track” with partners being updated on the potential tie-up in regular update meetings.
A partner vote was initially thought to be last week. However Manches Thames Valley managing partner Richard Smith denied any vote had taken place and told The Lawyer that it was “probably a week or more away” given the amount both firms have to do in preparation.
When The Lawyer revealed that the merger talks were taking place last month (24 September 2014), sources said partners had been given until the end of the week to agree to a lock-in deal. However Smith later said that no decisions had been made about lock-in agreements.
He added that the firm was sensitive to the reassurance that staff and clients need about mergers so could not give details until a concrete decision had been made.
If the firms combine then it would lead to a business of around 115 partners across 8 UK-based offices. Both firms have recognised synergies in their real estate practices, private client and family work with Manches head of Thames Valley’s private client practice Anne Burnside having previously worked at Penningtons.
Manches has been under pressure to grow since its failed 2009 merger talks with Halliwells. At the end of the latest financial year net profit fell to a 10-year low, dropping by 42 per cent from £3.7m to £2.15m, while average profit per equity partner (PEP) fell below £200,000 for the first time since 2004/05. Revenue dropped to £26.3m in 2012/13 from £30.2m the previous year (24 July 2013).
Meanwhile South-East firm Penningtons merged with St Alban’s firm Wedlake Saint and Lincoln’s Inn outfit Dawsons in 2011 (3 May 2011), adding 10 to the partnership and replenishing the net losses of the past six years. Its revenue held steady in 2012/13, rising from £32.3m to £32.5m.